Commodity trade surges in Q3 led by machinery, transport

TRADE in commodities grew faster in the third quarter of 2016 on the back of robust trade in machinery and transport equipment, the government reported yesterday.

Preliminary results from the Philippine Statistics Authority (PSA) report on “Commodity Flow in the Philippines” showed that the value of goods traded during the third quarter of 2016 accelerated by 65% or P149.14 billion, up from the preceding quarter’s 39.3% and a reversal from the 37.4% contraction seen a year earlier.

Sought for comment, Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines in an e-mail said that “[t]his is actually a very good sign. It means there is growing domestic manufacturing and demand.”

The main driver of domestic trade for that period was machinery and transport equipment, which accounts for 31.7% of total value, or P47.31 billion. It was followed by food and live animals with P36.53 billion or 24.5% of the total, while the third biggest contributor was mineral fuels, lubricants and related materials with P21.42 billion or 14.4%.

“As mentioned, this increase can be attributed to momentum in the manufacturing sector,” he said. “The economy seems to have a clear and growing resurgence in manufacturing. It can also be tied to the growing push for more infrastructure development.”

Internal trade was highest in the National Capital Region, with a share of 22.7% of total traded commodities or P33.85 billion. This was followed by Western Visayas with 21.3% or P31.7 billion and Northern Mindanao with 12.2% or P18.19 billion.

During the third quarter, the highest positive trade balance was recorded in Central Luzon at P12.6 billion. Other regions recording billion-peso surpluses are: Eastern Visayas (P10.67 billion), National Capital Region (P9.21 billion), Northern Mindanao (P5.25 billion), Davao Region (P4.68 billion), Western Visayas (P2 billion) and Soccsksargen (P1.8 billion).

On the other hand, Central Visayas posted the highest negative trade balance at minus P19.49 billion. It was followed by Caraga (minus P13.02 billion), Calabarzon (minus P6.01 billion), Zamboanga Peninsula (minus P4.4 billion), Mimaropa (minus P2.11 billion) and Ilocos Region (minus P1.27 billion).

Asked for an outlook, Mr. Asuncion said economic growth will continue and noted the importance of the aggressive infrastructure program. Meanwhile, he projected that the economy will grow 6.9% in the fourth quarter of 2016, with a full-year estimate of 7%.

The PSA is scheduled to release official GDP (gross domestic product) results on Thursday. —